Upfront fees are the most common talked about issue in the financing industry.

For those who may not know, an ‘upfront fee’ is any amount of money requested to be paid by the borrower to the lender/investor BEFORE closing the loan and distributing the funds to the borrower.

I’ve heard countless terms from funding sources to explain what this ‘upfront fee’ is all about.

Here are a few: Consideration Fee, Underwriting Fee, Due diligence fee, Commitment Fee, Retainer.

The reason why it has caused much debate is because there are hundreds, if not thousands, of scam artists out there who ask for these ‘up front fees’ to ‘process’ the loan.

These fraudsters will promise a loan to anyone, regardless of project merit or credit eligibility!

They know exactly what documents to provide, what words to say and often will create fake websites to go along with their operation.

99% of my clients have come to me with one major request in seeking funding:


I’ve been told story after story about how my clients were scammed out of hundreds of thousands of dollars!

On the other side of the coin, though, are the legitimate lenders/investors. These big players who run huge lending machines will sometimes ask for an upfront fee, as well.

The bank or lending institution requires this capital for the underwriting process, inspector fees and a handful of other costs that arise during the entire loan process.

Most of the time, the upfront fees will be returned to the borrower if the loan doesn’t end up coming to fruition OR reimbursed to the borrower at closing.

So, brokers/consultants are stuck between a rock and a hard place. We have clients who refuse to pay these upfront fees (for good reason!).

Yet, the only parties willing to fund their projects are those LEGITIMATE lenders who have upfront costs.

I want to hear from you!

To all Borrowers, Brokers/Consultants and Lenders/Investors – tell me about your experiences and express your opinion.

(The thoughts above are MY personal opinion. Please be nice in the comments! I do not take responsibility for what other people say/write).


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